Questioned by the committee on Thursday, she said: "I think that would make a significant difference in the sense that it is the only thing really that can help us to be rigorous about illegal working."

Illegal working was one of the factors attracting people to the UK and other European countries, she argued.

The government has yet to decide whether to introduce a national identity card, which has provoked stiff opposition in some quarters.

Ms Hughes said the asylum system was still suffering from the impact the late delivery of a new computer system in 1999 had on the claims backlog.

That delay was a "catastrophe" which had helped create the current claims backlog, she said, especially as about 1,200 case workers were laid off too early.

Ms Hughes said the backlog was an "albatross" around the department's neck, but it had fallen to 40,800 in the latest published figures and since then had dropped further.

Backlash danger

In a report published before Thursday's questions, the MPs say the increase in the number of asylum seekers in the UK - from 4,223 in 1982 to 110,700 in 2002 - is "unacceptable".

They warn: "If allowed to continue unchecked, it could overwhelm the capacity of the receiving countries to cope, leading inevitably to social unrest.

"It could also, and there are signs this may already be happening, lead to a
growing political backlash which will in turn lead to the election of extremist
parties with extreme solutions."

'More failed asylum seekers are being removed'

The British National Party last week became the second largest party in Burnley in the local elections, but only holds of the UK's 22,000 councillors.

But BNP leader Nick Griffin said tensions in places like Bradford and Oldham were nothing to do with asylum seekers.

Instead, they were caused by a "failed multi-cultural experiment" and problems between young Muslims and other communities, he claimed.

The MPs are also critical of the government's decision to set a target to remove 30,000 applicants a year - a target which was never met and subsequently abandoned.

The MPs say it served "only to arouse false expectations... which can only prove demoralising for all concerned".

Action

The MPs also berate a lack of "reliable statistics" indicating how many failed applicants remain in the UK.

Shadow home secretary Oliver Letwin said the report was a "damning indictment of a system in chaos" and called for the present regime to be scrapped and replaced with a system of quotas.

"Already we are seeing otherwise sensible people being enticed to vote for extremists because of their worries about the asylum system," he said.

Ms Hughes said the government was taking "decisive action" to target illegal entry and halve the number of asylum applications by September.

"The UK Immigration Service is currently removing more people than ever
before," she said.

Fair treatment

The government was as frustrated as the public over the lack of reliable figures on the number of asylum seekers in the UK, she added.

Chris Mullin, the committee's chairman, said it was important to remember that "whether we are dealing with genuine asylum seekers or economic migrants, we are dealing with human beings, not numbers and they should be treated accordingly".

And the report said it was wrong that people awaiting deportation were left in a state of destitution when they could be allowed to work or receive state support in some form.

The committee backed a government proposal to introduce passport checks on people leaving the UK to help establish how many people are living here illegally.

And the MPs say there have been improvements in the asylum removals system in the past month.